Reforming Regulatory Reporting: Are We Headed Toward Real-Time?

In the wake of the financial crisis, regulators have overwhelmed banks and insurance companies with compliance. The objective is to make absolutely sure that taxpayers will never again be called upon to bail out "too-big-to-fail" banks. Reporting timeframes have been squeezed to weeks instead of months, and data requests have become more granular as the crisis exposed the need for high-quality, comparable and timely data on the global financial network.

According to a current BearingPoint Institute paper, the pursuit of restoring trust and confidence in the financial system could all be a wasted effort if the historic model of reporting - through prescriptive templates - is not scrapped and replaced with a modern, digital approach to supervision. While the process has moved online over the past few years, the methodology is still template-based, which the paper's authors say is inefficient and impedes regulatory objectives to reinforce the soundness of banks. The current methodology does not enable the speed that is needed for accurate and prudential supervision.